Skip to main content
7:00 pm
suggests it is 1775 that was a critical launching point of the revolutionary war. sunday night at 8:00 on c- span's q&a. >> coming up, and look at the so-called fiscal cliff. weekly addresses from president obama and with republican senator roy blunt. >> hi, . i have been working to come together around a plant to grow the economy and shrink our efforts -- deficit. it is a balanced plan, one that would cut spending in a responsible way and ask the wealthiest americans to pay a little more. i will keep working with anybody serious about getting a comprehensive plan like this done because it is the right thing to do for our economic growth. we are not at the point where in a couple of days, the losses at
7:01 pm
the americans' tax rates are going up. the americans paycheck will get a lot smaller. that would be the wrong thing to do for our economy. it would hurt middle-class families and it would hurt the businesses that depend on your spending. and congress can prevent it from happening, if they act now. leaders in congress are working on a way to prevent this tax hike on the middle class and i believe we may be able to reach an agreement that can pass both houses in time. but, if an agreement is not reached on time, i will urge the senate to hold an up or down vote on a basic package that protect the middle tax from the income tax hike, extends vital unemployment insurance and lays the groundwork for future progress on more economic growth and deficit reduction. i believe such a proposal could pass both houses with bipartisan majorities, as long as these leaders allow it to come to a vote. they still want to vote no, let tax hikes it the middle class,
7:02 pm
that is their prerogative. but they to let everybody else vote as well. that is the way this is supposed to work. we just cannot afford it politically self-inflicted wound our economy. the economy is growing but keeping it that way means folks you sent to washington have to do their jobs. the housing market is healing but i could stall if folks see smaller paychecks. the unemployment rate is the lowest it has been since 2008, but already families and businesses are holding back because of the disfunction they see in washington. you meet your deadline. you meet your responsibilities every single day. the folks you sent here to serve should do the same. we cannot let washington politics get in the way of america's progress. we have to do what it takes to protect the middle-class, grow this economy, and move our country forward. thank you, everybody. >> hi, i'm senator roy blunt from missouri. as we bring 2012 to a close, leaders in washington have an
7:03 pm
opportunity to kick off the new year by working together to solve some of the challenges facing our country today. at a time when our federal debt topped a record $16 trillion, it has been more than three years since a democrat leaders in the senate passed a federal budget. the senate majority leaders refuse to bring any appropriations bill to the floor this entire year. there is a saying that when you fail to plan, you plan to fail. that is exactly what they have been doing. small businesses and farm families to not know how to deal with the unfair death tax, that the president has threatened to expand to include even more families marsden -- family farms and small businesses. energy projects and to the united states are being held back by federal obstacles of all kinds and the keystone xl pipeline is hanging in the bomb -- balance because the president has refused to move forward on
7:04 pm
what should have been an easy decision for more energy and more jobs. republicans hope to work across the aisle to solve these and other critical challenges facing america in the new year. divided government is a good time to solve our problems and in the next few days, leaders in washington have a . -- an important responsibility to work together to do just that. unless the congress of president act immediately, every american will be forced to pay for the largest tax hike in our nation's history on january 1. at the same time, the federal government, including our armed forces, will undergo deep budgetary cuts. these are the cuts that president obama promise to run the campaign would never take effect. what we need to reduce spending, we can do it in a smarter way. economists not representing either political party have continually warned that going over the so-called fiscal cliff will lead to devastating job losses at a time when american
7:05 pm
families and small business owners are still struggling to get back on their feet. in contrast, the nonpartisan congressional budget office estimates extending tax rates for all americans would create the 1.8 million jobs and increase the nation's gross domestic product by almost 1.5% next year. every american taxpayer that the tax cut in 2001. those cuts were good for the economy and families. congresses action to make the first bracket and% and that that 15%, double the tax credit and deal with that marriage penalty and tax code, make a difference to a lot of american families. going over the fiscal cliff is avoidable. there is that much time but there is still time to act. both president obama and senate majority leader harry reid claim it is an achievable plan, one that can pass both houses of congress. and republicans agree.
7:06 pm
the republican controlled house is taking the step into the right direction. the house has already passed a bill to protect all americans from burdensome tax increases. they passed legislation rick -- replaced damaging spending cuts with responsible targeted ones and to bring our nation's record debt under control. instead of working across the aisle and considering the house passed plan to protect taxpayers, senate democrats spent months going partisan -- drawing partisan lines in the sand. the president's proposal to raise taxes on the top to% of americans will might even play one-third of the annual interest owned on this massive $16 trillion debt. the president's tax hike would only fund the government for eight days. americans deserve to know what does the president propose we do for the other 357 days of the year. inaction should not be an
7:07 pm
option. the problems facing our country are big with their not necessarily all that complicated. the president will never have more political capital and then he does right now. in debt -- the next few days will begin to define his second term. he was elected to lead. we can still avoid going over the fiscal cliff if we step for this week and republicans to solve this problem and solve it now. >> we talk with washington post reporter laurie montgomery this morning for the update on the fiscal cliff negotiations. >> tell us, what kind of a deal the president offered and what is new in the negotiations among the senators and between the senators and the white house? >> there does not appear to be anything new. the policy they are talking about are the same public -- policies that have been on the table for weeks. what is new is they seem to have
7:08 pm
finally agreed they will move forward with something. there is no guarantee that the republican leader and democratic leader will be able to put together an agreement. but they are now saying they will try to do it. they are working together and amy towards a vote sunday are monday. >> what is the scuttlebutt among the rank-and-file senators about whether or not they're going to be able to pull this off before the end of the weekend? >> it happened so late, and it was really difficult -- i do not believe anyone has been briefed. there is an absolute lack of information among the people who are actually going to have to vote on this. house members are not in washington right now. there will not be in until sunday evening. senators are here, but they are not in session today. the leaders wanted a day of peace to pull this together.
7:09 pm
people are going to start to get briefed tomorrow afternoon. >> both majority leader harry reid and minority leader mcconnell, both expressed optimism after the meeting with the president. what is the basis of their optimism, and is this a sign that we might be one step, two steps closer to a deal? >> it does appear that we are a step closer to a deal. what they're talking about doing is extraordinarily popular stuff, except for a big marquee item, which is letting taxes rise on the wealthy. however you define that. the rest of the stuff they're looking at doing is stuff they do all the time. extending expiring tax policies that benefit businesses, extend college tuition credits, protecting people from the alternative minimum tax, which they do every year. it is all very urgent stuff that needs to be done. there are only two even remotely
7:10 pm
controversial parts of this, what to do with the estate tax, and how to define the wealthy people whose taxes are going to go up. the rest of it is basically protecting people from tax hikes, extending unemployment benefits is sometimes controversial for a republicans, but it appears to have agreed they would do that if they can reach an agreement on the tax stuff. it should be relatively easy if they can reach an agreement about what to do about taxes for the rich. >> in your article this morning, you quote majority leader reid, who said, whatever we come up with is going to be imperfect. we're going to do the best we can for the country. it seems like he has made his
7:11 pm
decision, and he is moving forward with this. what is going to take to get the rest of the folks to go along with him? >> i guess we will not know until tomorrow. they expect to not be able to turn off the sequester. the obama administration has some ability to blunt the effect of those cuts, but there are lots of people in the republican party especially to are very upset with the cuts that would hit the pentagon. it may be difficult to rally republican votes if they cannot turn off the sequester. on the democratic side, the estate tax could be a problem. the republicans are insisting that the estate tax stay at
7:12 pm
current levels, which is exempt states up to $5 million. many democrats would like to see -- in january, it is scheduled to come -- it is scheduled to go up dramatically. on states as small as a million dollars would be taxed. most democrats want to see something in the middle. they're adamant that we cannot exempt states as large as $5 million. that could be another sticking point. >> lori montgomery, to expect anything else to go on today? when is the earliest that the senators will come back in for session tomorrow? >> the senate is due back in at 1:00. the house is due at 6:30. the house is the big question mark. it is very difficult to imagine what could pass the house. as for today, it is an excellent question.
7:13 pm
the senate is not in, the house is not in. my understanding is we're going to have basically everyone working quietly to see if we can reach an agreement. it will be interesting to see if they give us any information today. >> lori montgomery of the "washington post," also fiscal policy reporter there. thank you very much for being on the program. >> thank you for having me. >> and acted on the fiscal cliff on this morning's washington journal. it is about 40 minutes -- an update on the fiscal cliff on this morning's boston to journal. it is about 40 minutes. >> one of the articles in this morning's wall street journal had the headline, a payroll tax is likely. expires on monday.
7:14 pm
the idea of extending the tax breaks has dropped out of your and negotiations between the white house and congress over how to avoid the fiscal cliff. $500 billion in combined tax increases and spending cuts set to begin next week. if we go over the cliff, how will the payroll tax cut the effective? >> thank you for having me. the payroll tax is one of the components of the fiscal cliff. as the article points out, most of the discussions and plants have not involved in extending that to read what that means is, the first paycheck in january, federal withholding for social security will increase and take- home pay will drop by about 2%. host: from what you have seen and heard of the negotiations going on back and forth between the white house and senate and
7:15 pm
house, what other items are you most concerned about regarding how going over the cliff will affect the average american? guest: most of the discussion thus far has focused on the individual income tax provision that for the most part had been in affect for the past 10 years or so. one aspect of the fiscal cliff does not actually -- is not about 2013 taxes. but it still left over business from 2012. congress has not yet enacted its annual fixed to the alternative minimum tax. if no action is taken, and a lot of people have probably not even heard of the alternative minimum tax. it would insnare more than 30
7:16 pm
million taxpayers and complicate the tax filing season that begins in january and and in april. >> explain what the alternative minimum tax is and why it was put in place and why now? all this and more people might be subjected to it than previously. >> it is basically a parallel -- parallel tax system. it was initially designed to make sure that a small group of high-income taxpayers were paying some minimum rate of tax. because of its nature and because it has not been indexed for fishing, it has grown and would begin to affect more and more taxpayers further down the
7:17 pm
income ladder. the major, the alternative minimum tax allows certain deductions and exemptions. most notably, exemptions for a persons and their dependents and the deduction for state and local taxes. those of the big reasons why people find themselves needing it. >> we are talking with joseph rosenberg with the tax policy center. we want to show our viewers household incomes and the average tax increase they might expect if we run this car off the cliff. for folks up to $20,000, they can look forward to an increase of about $412. between $40,000 and 64,000, an
7:18 pm
increase of 1900 dollars. between $64,000 and $80,000, $3,500. if you are making $100,000 and up, you can expect a tax increase of $14,173. tell us, the differences between what the white house wants and what the republicans want a in a final deal and how far away are they on coming together on this? guest: the various approaches are relatively similar for the majority of taxpayers basically the debate is more are less howe, which tax cuts to extend and at what income level they
7:19 pm
should be extended for. the president's, however since his first election campaign in 2008, has maintained that the tax cuts should be allowed to expire for incomes over $250,000. on the other side, republicans would like to see all the tax cut continue, although there were additional tax cut added in 2009 as part of the stimulus act. those that primarily benefit the low and middle income households, the republican plan would not [indiscernible' host: we're talking with joseph rosenberg.
7:20 pm
if you want to get involved, the phones are open. could also send messages via e- mail and twitter. the conversation continues on facebook. our first call comes from greg, in missouri. on our line for republicans. caller: let me talk a little bit. we have $16 trillion in debt. we tax all the rich people, we'd make $80 billion. that will last us 10 days. where can you justify taxing the rich pressed the market does not make sense to me. and you keep taxing us. people will move out of the country. they are moving out of california because they are getting taxed. keep in mind, this is ridiculous. the president has put us in a terrible situation.
7:21 pm
host: you to get your television to and because pedro is a much better looking individual than i am. your thoughts? guest: it is important to get a distinction between what the current debate is about. what changes are policy makers going to make for next year? the debates right now is a very short-term debate about taxes and spending policies over the very short term. that debate is not going to be the final debate. there are still plenty of issues that we're going to need to deal with with the more medium and longer-term structural issues with our tax and spending policies. that is really a much larger debate and it is true that taxing the rich or really any
7:22 pm
one solution is not going to be sufficient to solve the entire problem. it will take several or many different pieces to fix the larger issue. >> next up is wesley in wisconsin. on the line for democrats. caller: good morning. a tax of 75%, they are fighting it right now, saying it is unconstitutional. if we drop from the cliff, i guess we are going to go off but the pen is mightier than the sword. the people that put us there, get rid of them, that is all i can say. host: you think going to a luxury tax like france would be the way to go? caller: i think so. they can put a bullet lot -- a big luxury tax on the big ya
7:23 pm
chts. guest: i think it is useful to step back. what happens if we go over the fiscal cliff or get the type of deal the president is looking for? what we're talking about the top individual income-tax rate rising from 35% to 39.6%, the same tax rate we have before 2001. we do not need to be up at the 75% level. i would not advocate the go there but i think that is not really where we are and it is not where we need to be. host: we have a treat, who -- we
7:24 pm
have a tweet. they write -- host: the payroll tax is to% of income. -- guest: the payroll tax is 2% of income. the benefits of the payroll tax are larger or more important probably for low and middle income working families than they are for higher income families. that is certainly true. you have to remember that the payroll tax was a temporary provision. it actually was enacted at the end of 2010 to replace another temporary provision which was even more targeted toward low and middle income working families. i do not think anybody would dispute that at some point it needs to expire.
7:25 pm
the question is whether that time is now or whether it to go on a little bit longer. >> his research is on businesses in corporate taxation, brought bass consumption taxes, tax reform and tax incentives for charitable giving. back to the phones. jack in michigan, on our line for independence. go ahead, jack.
7:26 pm
caller: i want to ask mr. rosenberg if he has ever heard of lincoln electric in cleveland, ohio. host: and why did he wanted to know that? caller: well, they wrote a book, james f. lincoln wrote a book, a new approach to industrial economics where they have no unions. everybody is responsible for their own work. they do peace work. everybody's responsible. everybody has a lifetime job. they get huge pieces of the pie. and ownership is -- the people, the workers, everybody owns the piece of the pie. host: what does this have to do with the fiscal cliff? caller: well, if more -- if more people -- if more industries would go to that, they wouldn't fall off the cliff. everybody would go to work. host: mr. rosenberg? guest: so i haven't heard of that but it sounds like a great place to be and live.
7:27 pm
i would have to get the name of that again. host: next up is don on the washington redskins. -- "washington journal." caller: i've been on social security for several years now. it's my understanding that the amount of money that you pay in through the payroll tax affects the amount of social security that you receive and it looks to me like people are under the illusion that this 2% is a good deal but at the same time, why they're going to be shortening themselves when they retire. is that right? guest: so that's a good question. it actually isn't really right. so the payroll tax is basically being used as a vehicle to deliver the tax cuts to workers.
7:28 pm
the way the federal budget accounting works is that the money that is not going into the social security system via the reduced payroll tax, is being reimbursed from general revenue so the reduced -- the reduced payroll tax from the last few years will not affect benefits that you accrue for the future. host: mark of the american enterprise institute writes under the headline "make the middle class pay more." he says --
7:29 pm
host: your thoughts about what mr. threesen had to saw. say. guest: i differentiate the debate we're having that it's basically about the tax system for next year and maybe the year after. and a longer term debate about tax and spending policy. and i think going forward, especially after the economy has a chance to fully recover and is on stronger footing, then i think it is not only a reasonable but necessary for taxes to go up relative to what they have been the past few years and even over the past 10 years to rise to slightly higher levels in order to meet the spending needs that the country seems to long.
7:30 pm
host: ed is in columbus, ohio. he's talking to us on the democrats line this morning. ed, you're on the "washington journal" with joseph rosenberg, research associate at the tax policy center. caller: thank you, good morning. mr. rosen berg, with the fiscal cliff blooming, do you believe the i.r.s. will be able to calibrate their system at this late of a date and would the debt ceiling debate blooming, could that delay federal refunds? thank you. guest: yes. the question about the i.r.s. is a good one and it is an important one. so it almost is certainly bound to complicate the filing season. i think already the i.r.s. has said that they are -- they have not released updated withholding tables for winner to. -- 2013.
7:31 pm
what that means is employers will use the withholding tables for federal income tax. but if a deal is made or no deal is made, that's going to have to change and at some point, employers will have to change their federal income tax withholding amount. i mentioned with the alternative minute 34u78 tax, that will -- minimum tax, that will complicate the season. i think the i.r.s. has said as many as 70 million tax filers could be subject to delays if the a.m.t. is not patched for 2012.
7:32 pm
host: antonio in nashville, tennessee. you're on the "washington journal." go ahead. caller: good morning, gentlemen. thank you. i'm going to say i'm going to guarantee you guys that there's no -- there's not going to be a fiscal cliff because the fiscal cliff compass more than just taxes. you've got the quester and the unemployment insurance. the republicans and democrats know that they can't afford to go back in a recession at this point and the republicans are going to get blamed for it. the taxes still increased and y'all promised not to do that and on the other hand, if they make a deal now, they can go back and say look, we're not in total control. we only control the one branch of government so we made a deal to keep the taxes, you know, low on 98% of the country and that's to win. and as far as the sequester, the afford to lose all those military jobs.
7:33 pm
that's 100 million jobs possibly lost. and then you've got the unemployment, you know, two million people unemployment, they can't afford not to have that revenue injected into the system so i believe come monday, they're going to have a deal. i believe it. there's not -- they are not -- i'm going to guarantee you you guys. host: eve got a guarantee from antonio. joseph rosenberg who makes a living researching this material. are you willing to throw your lot in with our last caller? guest: you know, i think he's probably on to something. now, i mean, i'll point out that the deal doesn't have to come next week before the 31st. it would be better if it did but then again, it had been better if it came last summer or the year before. there is time to do the deal in early january or even later than that and retroactively make all the fixes and there is likely not to be significant effect and i think the deal that -- and i think the likelihood that something like that happens by mid to late january is very high.
7:34 pm
now, i mean, again, we've talked about that. that doesn't mean that everything will be avoided. so the payroll tax likely will not be part of the deal. so we will -- it is while it is very likely that we will not go over the fiscal cliff as it were in its entirety, there will be changes that take effect to some extent. host: we have not for pub is one of our tweeters and says that wants to know what 2012 filings does the fiscal cliff effect? -- affect? guest: so we've already talked about the alternate niff minimum tax.
7:35 pm
that's the big one. but there's a host of expiring tax provisions that lumped together and usually referred to as the tax extenders. and a number of them expired at the end of 2011. aside from the a.m.t., it includes things like on the individual side, an adoption credit, the ability for individuals to deduct state and local sales taxes as well as on the business -- there's also a host of tax provisions on the business side. all those are things that are expired for the 2012 tax year, but is possible will be resurrected in any fiscal cliff year. host: joseph rosenberg, research associater with the tax policy center. to find more information about not only mr. rosenberg at their website,
7:36 pm
we've got another -- no, we don't have another tweet. let's go back to the phones. milton in miami, florida, on our line for republicans. go ahead. caller: good morning from warm south florida. host: ok. caller: i have a question and your ph.d. candidate might be able to answer this. is the president looking to actually raise more tax revenue or punish people? because history tells us that if you lower tax rates, you take in more taxes. so what's he trying to accomplish here? that's number one. number two, only in washington could they take a mathematical problem, mainly social security, and cause it to be a political problem. is there a way to fix either one? host: take the first part of that --
7:37 pm
guest: take the first part of that. i take issue with the idea that tax cuts increase revenue and the converse that tax increases would reduce revenue. that's not the historical experience. that's not the view of virtually every economist that i've met. look, it's important to remember that really what we're talking about is extending current tax cuts. and the question is which tax cuts should be extended and for whom. taxation is not an economic science. it definitely -- if you gather 10 people in a room, you're going to get 10 different opinions and the views on taxing -- on the merits and philosophy of taxing individual asks the rich
7:38 pm
will vary. but, you know, this sort of immediate problem is not necessarily the larger philosophical question. it really is the more practical question of what is our tax system going to look like. host: and we've got this lead editorial from this morning's "wall street journal." real housewife offense the beltway. they write --
7:39 pm
host: back to the phones. don in oklahoma city on our line for democrats. go ahead, don. caller: good morning. i have a couple of quick comments i would like to make. the first is that i find it ironic for so many years in recent history republicans have claimed to own patriotism yet they don't seem to want to vacate their fair share. host: joseph rosenberg. guest: you know, i mean, i'm not sure, you know, i'm not sure this is about pay. -- patriotism or anything like that. you know, the question of who should pay taxes and how much is again, as much a political question and is as it is, an economic question.
7:40 pm
you know, i mean, i think it's important to remember that the sort of recent history of the sort of evolution of the income distribution in the united states where we've seen increasing income inequality and an increasing share of pre-tax income earned at the very top. and so a sort of -- it's a certainly valid debate to say well, should our tax system recognize that fact and adjust and look to first raise taxes at the very top before going down the income ladder? but again, i think ultimately, we're going to have to look to raise revenue at all income levels to some extent and that's probably inevitable. host: earlier, we talked a
7:41 pm
little bit about how this is going to affect taxpayers, but what is the i.r.s. doing? how are they preparing for whether or not we go off the cliff? do they have a plan and a plan b? guest: so i'm not exactly sure. i'm sure there is considerable lengths at the i.r.s.. obviously, it is difficult for them to prepare tax forms when the law is not set even yet for 2012, let alone to tell employers how they should withhold taxes in the coming year. so, you know, it's certainly a case of a solution that comes more quickly is better for -- from their point of view. host: we've got a tweet from wild and wonderful and she says all of this could not -- all this would not be happening?
7:42 pm
mitt romney had won in november. right, because when g.o.p. is in the white house, deficits don't matter. can you tell us a little bit about the philosophies of the two candidates? well now, the president and the ex-candidate. will the situation be that much different if there was a different man in the white house? guest: well, look, it's an interesting question. it is certainly true that tax policy was one of the key sort of issues in the last election. and actually, the debate that we're having if it sounds familiar, it's because we've had it several times before. it was really a similar debate to what we had in 2008. we had the same debate in 2010. we had a similar debate in 2011 when we were dealing with the debt ceiling issue the first time around.
7:43 pm
and we dealt it with it in the last election. and the differences have always been that president obama has maintained that tax cuts should be allowed to expire for people making more than $250,000. mitt romney called for extending all the tax cuts fully. and making other changes to the tax code. but, you know, i mean, he wouldn't be in office right now anyway. so i think we would still be here talking about what to do come january 1. host: all right. david in maine on our line for independents. go ahead, david. caller: yes. i've been around for a few years and i've seen this coming since 1970. when revenue -- when wages did not go up, revenue doesn't come into the government. and when we constantly spend and promote money, shipment overseas, shipment job overseas,
7:44 pm
and we blame people like me on social security, you know we're elite on systems. excuse my language. host: david, we're going to leave it there. joseph rosenberg. guest: it is true right now that tax collections are at near historic low but that largely remains a result of the still weak economy. and so when the economy went into recession in late 2008, tax collections really plummeted and have remained low both because incomes have remained low and we have enacted counterfiscal policies that have reduced taxes further. that will reverse itself to a larger extent that's economy recovers and especially if things like the payroll tax cut expires and other of these tax cuts expire.
7:45 pm
so, you know, going forward, tax collections will stabilize and rise. there are still a long-term or medium and long-term structural imbalances between revenue and spending that will need to be addressed. but that's a fight for another day. host: we have got -- we had a tweet there. let's go back to the phones then. joe in makinaw, illinois, on our line for republicans. go ahead. caller: yes. i just like to remind my republican friends that what we have is a problem here of imbalance. we cannot go into an austerity program like mr. rosenberg has been talking about.
7:46 pm
we cannot have an austerity program and grow our way out. we have to spend more. and i'm so happy that mr. rosenberg has said that he's debunked this idea that when you have lower tax rates, you increase revenues because that is complete fallacy and he has been very good about stating that situation. host: how much more do you want to see us spend? joe? caller: how much more do i want to spend? host: yeah. caller: well, i think he's right when he says that taxes have to go up on everybody eventually. but what the president is doing is he has maid his political statement to get re-elected and it got him re-elected and -- host: and we're going to leave it there. joseph rosenberg. guest: yeah, no. so i don't disagree with a lot of what the caller said. it is important to point out
7:47 pm
that the real danger of the fiscal cliff is not -- is not an issue of high deficits and high debt levels, but rather is the idea that we would go too far too fast for the direction of deficit reduction and austerity to borrow the word of the caller. so really, the question is how much -- so the past few years, you could think of the federal government as appropriately putting its foot on the accelerate to help a weak economy. the question is how quickly and -- how quickly the government should ease off the gas pedal, what the fiscal cliff is essentially taking the foot off the gas, putting two feet on the brake pedal and standing up.
7:48 pm
that is not what we want to do. the question is finding the right balance that still supports a vulnerable economy, yet begins the process to renormalize the revenue level of the federal government. host: now we've got the tweet from a fussy liberal. it says it's time to be a liberal and -- host: how much of the fiscal crisis can be attributed to the war into the afghanistan that were not part to the original budget? caller: it is -- guest: it is instructive to go back. if you look at the current deficit over $1 trillion, still a majority of that is related to
7:49 pm
the recession that began in 2008. however, it is certainly true that going into that recession, we were dealing with structural deficits that were result-a-result of tax cuts initiated during the bush administration and higher spending levels as well. and so you know, all of those play a role and it's certainly true that at the end of the day, more or less, what we decide to spend as a society, as a government, we have to then raise in taxes. so we cannot independently choose the level of taxes and the level of spending at some point sooner, those are to more or less balance. host: joseph rosenberg is a
7:50 pm
research associate at the tax policy center and we're talking to him about who's affected by the fiscal cliff. we've got about another five minutes left in this segment. we want to show you our listeners and viewers a little bit about what center blunt of missouri had to say. he is doing the republicans radio address this weekend. and he talks a little bit about the president's proposal to raise taxes on the top 2%. let's see what he has to say and we'll get a response back from joseph rosenberg. tothe president's proposal raise taxes on the top 2% of the americans won't pay one third of the annual interest that is owed on this debt. the president's tax like -- hike would only fund the government for eight days. americans deserve to know what is what do we do for the over 357 days of the year? inaction shouldn't be an option. the problems facing our country
7:51 pm
are big but they're not necessarily all that complicated. the president will never have more political capital than he does right now and the next few days will begin to define his second term. he was elected to lead. we can still avoid going over the fiscal cliff if the president and the democrat control senate step forward this week and work with republicans to solve this problem and solve it right now. host: joseph rosenberg, your thoughts on what the senator had to say. guest: well, look, i'm not interested in getting in the middle of the political back and forth. you know, i think the main -- the first idea is similar to an earlier caller about this sort of insufficiency of only taxing the rich. and that's certainly a valid point.
7:52 pm
youink, again, there's -- need to draw a distinction between what we're currently talking about the immediate issue of what our tax system will look like next year and then -- and separating that from the longer term issues of tax and spending in which there are, you know, real philosophical differences about the role of government in social insurance in providing health care and how we're going to raise revenue going forward. host: our next caller comes from chris in houston, texas on our line for democrats. go ahead, chris. caller: hi. i'm just saying that payroll tax, we really don't get a tax relief because at the end of the year, we had to pay -- we get less back from the government on our income tax.
7:53 pm
and what the payroll tax does, it just gives us more money during the year. and one other thing. president bush had a surplus at the start of his term of being president. instead of giving that tax rate to the rich, he should have put that money into medicare. what kind of fool doesn't see the babyboomers coming into their health issues? host: joseph rosenberg. guest: so just as a point of clarification, so the payroll tax cut, it is not recaptured at the end of the year.
7:54 pm
so that is -- for the past two years, the tax rate has been reduced by 2% that has basically been trickled out in paychecks in the form of lower withholding throughout the year. but is not later recaptured at the end of the year with a higher tax. host: next up is mickey in kings port, tennessee, on our line for independents. go ahead, mickey. caller: good morning. first of all, let me say that i am definitely not in the rich class. i'm closer to the bottom as the top. but my question being fair, what's wrong with having a fair tax or an equal tax where no matter what income level you have if you make $10,000 a year or $10 million a year, that you pay the same percentage on your gross income or we tax everything that's sold. that way, there's no way of getting around the deductive
7:55 pm
from the incomes? -- income tax? it doesn't make sense to me the way the program is set up. thank you. guest: we're transitioning the media issue of our current income tax to whether we should fundamentally rethink our tax system. the idea of sort of flat taxes or national retail sales tax, taxes have long been proposed and talked about. i mean, i think fundamentally, it sounds appealing, but, you know, what you're really talking about is relative to what we do now. you're talking about a much different way of raising -- much more revenue from lower and middle income people and less from
7:56 pm
the very rich. my sense is that's not where the american people are at. there is this sort of sense that higher income people raising the dollar revenue from them is sort of less harmful than it is from lower income folks. so, i mean, those debates are worth having, but i think when you actually get down to the specifics and play it out, things like a straight flat tax or national retail sales tax don't make a lot of sense. host: we've been talking with joseph rosenberg, a research associate at the tax policy center. if you want to get more information about the work that they do, you can go to our website, part of the urban tax policy working center. thank you very much for being on
7:57 pm
the program. guest: thank you. >> both chambers of congress are in tomorrow for zero unfinished business. the senate is in at 1:00 eastern. assistant secretary of housing and urban development and assistant attorney general of the justice department. votes are scheduled at 2:00 eastern. by coverage at c-span2. the house returns at 2:00 p.m. eastern with both as early as 6:30. legislation ranging from better rents and education to foreign aid. the house rules committee is planning on a possible meeting sunday to discuss terms for a fiscal cliff deal that could be on the floor as early as monday. watch live coverage of the u.s. house tomorrow here on c-span. >> more news on the fiscal cliff
7:58 pm
negotiations. according to the hill, president obama monitor talks from the white house and has indicated he would support legislation that would raise taxes on those who earn more than $400,000. harry reid has scheduled a democratic caucus meeting for tomorrow afternoon to discuss any potential deals. minority leader mitch mcconnell says he would do the same period in the house, speaker john boehner has said the senate must act first on legislation to avoid the so-called fiscal cliff. >> tomorrow on washington journal, the latest on the so- called fiscal cliff. with local columnist -- with roll call columnist. followed by a look at president obama's cabinet for a second term. our guest is david jackson. then a look at what is next. we are joined by michael gordon.
7:59 pm
washington journal, live at 7:00 eastern on c-span. >> tomorrow on newsmaker, indiana rep elect luke messer. he will talk about the 130 congress and his priorities at the incoming republican freshmen class president. join us sunday at 10:00 eastern and then later at 6:00 eastern here on c-span. >> as president obama begins his second term, what is the most important issue he should consider for 2013? >> if you are in crates 6-12, make a short video about your message to the president. >> with your chance to win a grand prize of $5,000. $50,000 in total prizes. the deadline is january. for more information, go to >> tonight,, and politics. polis by james
disc Borrow a DVD of this show
info Stream Only
Uploaded by
TV Archive
on 12/30/2012